Quest Diagnostics 2011 Annual Report Download - page 116

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(a) During the third quarter of 2006, the Company completed its wind down of NID and classified the operations
of NID as discontinued operations. Results of operations have been prepared to report the results of NID as
discontinued operations for all periods presented (see Note 17).
(b) Includes a pre-tax charge in “other operating expense (income), net” in the first quarter of 2011 of $236
million, associated with the settlement of the California Lawsuit (see Note 16). Also includes $13.3 million
of pre-tax charges, principally associated with workforce reductions. Of these costs, $9.0 million and $4.3
million were included in cost of services and selling, general and administrative expenses, respectively.
Results for the first quarter also includes $4.7 million of pre-tax transaction costs, associated with the
acquisitions of Athena and Celera (see Note 4). Of these costs, $2.3 million, primarily related to professional
and filing fees, was recorded in selling, general and administrative expenses and $2.4 million of financing
related costs were recorded in interest expense, net. In addition, management estimates that the impact of
severe weather during the first quarter adversely affected operating income by $18.5 million.
(c) On April 4, 2011, we completed the acquisition of Athena. On May 17, 2011, we completed the acquisition
of Celera (see Note 4).
(d) Includes pre-tax transaction costs of $15.1 million associated with the acquisitions of Athena and Celera (see
Note 4). Of these costs, $14.3 million, primarily related to professional fees, were recorded in selling, general
and administrative expenses and $0.8 million of financing related costs were included in interest expense, net.
In addition, results for the second quarter include $6.0 million of pre-tax integration charges, primarily
associated with workforce reductions, related to the acqusitions of Athena and Celera.
(e) Includes pre-tax charges of $27.3 million, principally associated with workforce reductions. Of these costs,
$15.9 million and $11.4 million were included in cost of services and selling, general and administrative
expenses, respectively. Also includes discrete income tax benefits of $7.9 million.
(f) Includes restructuring and integration charges of $5.7 million of which $8.7 million is principally associated
with professional fees incurred in conjunction with further restructuring and integrating the Company. The
remainder is primarily associated with the reversal of certain previously established reserves for restructuring
activities, principally associated with workforce reductions. Of the total $5.7 million, $8.4 million was
included in selling, general and administrative expenses, with the remaining $2.7 million representing a
reduction in cost of services. Also includes pre-tax charges of $5.6 million, principally representing severance
and other separation benefits as well as accelerated vesting of certain equity awards in connection with the
succession of the Company’s CEO. In addition, results for the fourth quarter also include discrete income tax
benefits of $12.6 million.
(g) Includes pre-tax charges of $17.3 million, principally associated with workforce reductions. Of these costs,
$4.5 million and $12.8 million were included in cost of services and selling, general and administrative
expenses, respectively. In addition, management estimates that the impact of severe weather during the first
quarter of 2010 adversely affected operating income by $14.1 million.
(h) Includes discrete income tax benefits of $14.4 million.
(i) Includes $9.6 million of pre-tax charges, primarily related to workforce reductions. Of these costs, $1.9
million and $7.7 million were included in cost of services and selling, general and administrative expenses,
respectively. In addition, the Company recorded pre-tax charges of $9.6 million associated with the settlement
of employment litigation. Results for the fourth quarter of 2010 also include discrete income tax benefits of
$9.1 million.
F-44